Learn the path to building wealth with real estate, but not in the way most people think. Paige Panzarello unveils the secret world of Note Investing Wealth, Non-Performing Notes, and how YOU can BECOME the bank.
In this video you’ll learn:
💸How Note Investing works on a fundamental level and why most people have never heard of this real estate investing strategy
💸Why Non-Performing Notes are a great investment choice when combined with the right level of due diligence
💸The different types of Non-Performing Notes and the strengths of each one
💸 How to find deals as a Note Investor without having to knock on doors, cold call, or spend any money on marketing
💸The four main exit strategies that allow you to pivot and remain profitable in your investment, no matter what’s happening in the economy
💸How you can do this kind of business anywhere in the world!
Everybody knows real estate investing is a powerful strategy for building wealth and a legacy for your family, but very few people know about Note Investing and how Non-Performing Notes can help you achieve your investment goals without all the usual risks.
What are Notes?
Notes are a debt instrument. Essentially, they’re just a promise to pay. When you’re dealing with debt instruments, you’re literally stepping into the shoes of the bank, which means that YOU literally become your borrower’s bank. Sounds scary, but it isn’t if you know the steps to take!
Do you really become the bank? YES!!!
In a buy and hold situation, you own the property. You lease your property to a tenant, and that makes you a landlord.
If the air conditioning breaks in your property, as the landlord, you now need to pay to fix it. You (or your property manager) are responsible for sending somebody out, and YOU have to reach into YOUR pocket to pay for the repairs. Sometimes the repairs will be so expensive, it can cost you a whole YEAR’s worth of rental income!
As the bank, if the air conditioning breaks, your borrower is not going to call you to make the repair. You do not have to pay for the AC repair guy to go out to that property, because you don’t own the property. BUT, as the lender (the bank) ON the property, you are still SECURED by the property.
As the Bank, you own the debt, meaning the mortgage or the deed of trust, and your investment is SECURED by the property. SO if the borrower stops paying that mortgage, you can go through the steps to foreclose or take over the property. In owning the debt secured by the property, you are not on the hook to make any repairs.
An added bonus? You can invest in Notes from anywhere in the world, as long as you have a computer, internet and a cell phone!
Are there different types of notes you can buy?
There is a whole world of notes for you to explore. You can buy
- Real Estate Notes
- Non-Performing Notes To build chunks of cash and streams of monthly cash flow
- Performing notes for cash flow
- First position liens
- Second position loans
- Third position loans
- Auto loans
- Judgment loans
- Credit card debt
You can buy Notes on residential properties, commercial properties, industrial buildings, warehouses and land, just to name a few. In other words, you have a ton of options.
Why would you buy a Non-Performing Note?
Buying Non-Performing Notes sounds counterintuitive. How do you make money buying a Note that is ‘Non-Performing’?
Because you can buy them at a discount.
Using the collateral, aka the building, as the basis for the purchase price at a discounted rate automatically builds in equity, which mitigates the risk, and makes buying Non-Performing Notes a great investment strategy.
Is there competition in Note Investing Wealth?
Like any form of real estate, there is competition in buying Notes. However, I call it the gentler form of real estate investing.
Note investing doesn’t involve being on the courthouse steps where you’re standing at an auction and people are bidding against you. It’s not like a fix and flip property where you’ve got other investors that are overpaying for houses.
You’re not panicking and trying to outbid somebody just to get a deal.
As a matter of fact, the deals come right to your email inbox! For free!
How do you find deals?
The wonderful thing about Notes is that it’s all about developing relationships with people.
I do not send out yellow letters, or knock on doors. I don’t cold call, and I don’t put up bandit signs.
I spend ZERO $0 marketing dollars for my deals. Instead I focus on going to conferences and meeting asset managers and other note investors, and I develop relationships.They send me their assets for sale at no cost. There is no” buying tapes” (a tape is the list of all the assets for sale) in our space, so if someone trying to “sell you a tape” please run the other direction!
Due diligence in Note Investing Wealth is CRUCIAL
There is no such thing as a bad note in my opinion, but there is such a thing as buying a note badly.
In Note investing, you will be spending the bulk of your time doing your due diligence and making sure that a deal makes sense (i.e. you have security) before buying the Note, so it’s absolutely vital that you don’t skimp on your due diligence steps.
Once you DO buy the note – you’ll be handing over the communication and documentation to your team of licensed debt collectors. They talk to the borrower and handle all paperwork. You then simply manage the team. I share a great case study in the training to illustrate.
Note Investing Exit Strategies
There are 23+ different exit strategies (ways to cash out) as a Note investor so there are plenty of ways to make sure your investment stays profitable and meets your goals.
The four main exit strategies we use on a regular basis are Foreclosure, Short Sale, Deed in Lieu of Foreclosure, and my favorite, Reperformance (Loan Modifications).
I share what they are, and give some examples to explain them in more detail, but the main takeaway here is the ability to have numerous ways to ‘cash out’ that don’t rely on the real estate market (like a Fix ‘n Flip would).
TAKE THIS FREE VIDEO SERIES TO LEARN THE BASICS ABOUT NOTE INVESTING
Get the 411 in this quick easy to digest video series, so you have a more comprehensive idea of what it is and if it’s the right next step for you.
Paige Panzarello is the “Cashflow Chick”. Having been a Real Estate investor and entrepreneur for almost 25 years, Paige has experienced many facets of real estate investing. Her experience includes founding and running her own Residential and Commercial Construction and Acquisition companies, Buy and Hold residential and commercial real estate investing, Tax Deeds/Liens Investing, Fix and Flip (Residential Remodeling), and other forms to name a few. She currently focuses on Non-Performing Notes that she purchases all across the United States. Whether in notes, residential or commercial real estate, in California, Arizona, or nationwide, Paige has been successful in completing over $150 million in real estate transactions to date.